Home Value, Due Diligence, AVM, Refi Products; Extensive HELOC, DSCR, Non-QM Product Changes

“No plan survives contact with the enemy.” While Freddie rolled out its AI plans, for some lenders, mortgage companies owned by builders, and the builders themselves, can sometimes be viewed as adversaries. In dealing with buyers of new homes, builders and their lender arm often adjust seller credits, par rates, and buy down programs. Builders, of course, don’t want to actually lower their prices since they want high comp prices for appraisals going forward. According to the Wall Street Journal, the nation’s largest homebuilders are giving buyers big concessions. The nation’s biggest builder is D.R. Horton, which is offering buyers a 3.99 percent mortgage along with a 3 percent discount on their new home. Lennar, the nation’s second-largest homebuilder, said it offered buyers incentives worth $64,000 on its average home sale last quarter. For any non-builder originator looking to provide an alternative, “Bargain mortgages originated by builders are helping more people get onto the property ladder. The hidden cost is inflated home values and underwater loans.” (Today’s podcast can be found here and this week’s are sponsored by Two Dots, whose conversational screening agent replaces manual underwriting with a streamlined, end-to-end process that reduces risk and fraud while securing safer borrowers, increasing profitable loan volume, and lowering underwriting overhead. Today’s has excerpts of the L1 Mortgage Matters weekly webcast from yesterday with MBA’s Marcia Davies on lessons from a career that’s soon culminating in retirement, and themes such as self-advocacy, and expanding opportunities for the next generation.)